MODULAR STORAGE SYSTEM MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The modular storage system Market size was valued at US$ 3.33 Billion in 2023 and is expected to reach US$ 4.41 Billion by 2030, growing at a compound annual growth rate (CAGR) of 4.1% from 2023 to 2030.

Modular storage systems refer to customized storage solutions comprising different components like racks, bins, cabinets, drawers, etc. that can be assembled as per requirement. They offer benefits like flexibility, scalability, ease of installation, and reconfiguration. The modular storage system market is driven by the growth of the e-commerce and retail industries, demand for affordable and customized storage, and increasing residential construction.

The modular storage system market is segmented based on product type, material, end user, distribution channel, and region. By product type, the market is segmented into racks, cabinets, bins, shelves, and drawers. The racks segment accounted for the largest share in 2022. The growth of this segment can be attributed to the high demand for racks for industrial and retail storage applications owing to benefits like durability, load-bearing capacity, and design flexibility.

Modular Storage System Market Regional Insights:

• North America is expected to be the largest market for modular storage systems during the forecast period, which accounted for over 30% of the market share in 2022. The growth of the market in North America is attributed to the rising demand from online retail and the presence of major manufacturers in the region.
• Europe is expected to be the second-largest market for modular storage systems, which accounted for over 25% of the market share in 2022. The growth of the market in is attributed to the increasing adoption of sustainable and energy-efficient storage solutions.
• Asia Pacific is expected to be the fastest-growing market for modular storage systems, growing at a CAGR of over 5% during the forecast period. The growth of the market in Asia Pacific is attributed to rapid urbanization and industrialization in emerging economies like India, Indonesia, etc.

Figure 1. Global Modular Storage System Market Share (%), by Region, 2023

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Analyst Viewpoint:

The modular storage system market shows promising growth prospects driven by the increasing urbanization and need for efficient storage solutions. Growing nuclear families and small living spaces have propelled the demand for space-saving furniture like modular storage systems. Further, the rising consumer preference for customizable and multifunctional storage units also aids the market's growth. Younger consumers particularly favor modular designs allowing flexible configuration. However, intense competition among market players poses threats to margins. Additionally, the availability of cheaper alternatives like ready-to-assemble furniture restrains the market to some extent. Nonetheless, introductions of innovative designs, durable and eco-friendly materials are expected to act as an opportunity.

The North America dominates the modular storage system market currently due to rapid real estate development and growth in disposable incomes of middle-class families in the region. Asia Pacific holds the second position and will witness steady demand owing to rising home renovations and remodeling activities. Meanwhile, countries across Europe and Latin America signify tremendous prospects for stakeholders, driven by growing urban population and awareness about space-saving furniture.

In conclusion, while competition and cheaper substitutes pose challenges, the modular storage system market is forecast to grow steadily supported by urbanization, small living spaces, and consumer preference for versatile storage options. Innovation and product premiumization will help key players sustain their positions in this dynamic landscape.

Modular Storage System Market Drivers:

• Growing organized retail and e-commerce sectors: The rapid growth of the organized retail and e-commerce industries globally is a major driver for the modular storage systems market. With increasing consumer purchasing power and growing online shopping, retailers are expanding their physical stores as well as warehouses and distribution centers to cater to rising demand. This is creating substantial requirement for efficient storage infrastructure. Modular storage systems like racks, cabinets and shelves offer benefits like customizability, scalability and quick installation which are extremely vital for rapidly evolving retail landscape. For instance, a major U.S. retailer, Target Corporation, accelerated its store openings in 2021 and added over 600 modular cold storage rooms. Similarly, Amazon which is a multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence, plans to expand its fulfillment network by 150 million cubic feet across various facilities in 2022 using modular storage solutions.
• Surge in residential and commercial construction: The steady rise in the new construction of residential and commercial buildings across developing regions is catalyzing the demand for modular storage products. Multi-family homes and apartments being built now have less storage space and require customized storage solutions. Commercial buildings like offices, hospitals and educational institutes also require efficient modular storage during construction as well as for future expansions. For instance, the demand for modular medical carts and Radio Frequency Identification (RFID) cabinets increased from healthcare facilities in 2020. Also, over 13,000 modular classrooms are being installed in schools across Africa and Brazil. The boom in global construction volume is thus contributing significantly to the growth of the modular storage systems market.
• Increased adoption of sustainable materials: Manufacturers in the modular storage systems market are developing eco-friendly products made using recycled plastics and composites. These help in reducing carbon footprint and enabling LEED certifications for facilities. Consequently, they are being increasingly adopted by companies to adhere to Environmental, Social, and Governance (ESG) goals. For instance, companies like Hörmann and Fantoni are offering modular storage made from recycled wood and straw pulp. The demand for steel racks and shelving with over 50% recycled content is also rising from industries. This shift towards sustainable materials is expected to remain a key driver.
• Several green building standards like LEED also award credits for the usage of modular systems and relocatable interiors as they reduce material wastage. This is propelling the deployment of modular storage infrastructure in green commercial buildings and thus driving the market growth.

Modular Storage System Market Opportunities:

• Potential applications in emerging economies: Developing economies with improving socio-economic conditions offer significant expansion opportunities for modular storage system providers. Countries like India, Mexico, and Indonesia, have been witnessing rapid urbanization, rising incomes, and a growing middle class population. This is resulting in boom in residential construction and retail landscape. Shopping malls, supermarkets, apartments and housing projects in these countries require cost-effective and customizable storage options where modular storage systems find increasing adoption. Industry players can focus on marketing, distribution partnerships and local production to tap into this vast untapped customer base through competitive pricing strategies. The addressable opportunity offered by emerging markets remains one of the key factors that will catalyze the market growth over the coming decade.
• Innovative designs and features: Companies have opportunities to gain competitive edge by introducing innovative designs, features and customization options in their product portfolio. Consumer expectations regarding visual appeal, space optimization and utility have increased. Providers can incorporate modular backsplashes, doors, cabinets, and shelving with visual enhancements through materials like decorative glass, wood laminates and metal colors which add aesthetics alongside function. There is also demand for storage systems with lighting, charging ports, humidity/temperature control and Internet of Things (IoT) connectivity for monitoring and tracking stored contents. Portable modular storage and customized outdoor storage present additional opportunities for companies to differentiate through innovation.
• Growth of the auto industry: Rapid production expansion and technological advances in the global automotive industry are creating lucrative opportunities for modular storage system companies. Automotive plants require customized and reconfigurable storage infrastructure like racks, lift systems and robotic shelving for factory floor optimization, inventory management and material handling. The sales of electric vehicles are also rising exponentially around the world. This is opening up requirements for modular storage systems at Electric Vehicle (EV) battery manufacturing sites and charging stations. Providers can develop tailored solutions catering to diverse storage needs of the thriving auto sector.

Modular Storage System Market Trends:

• Preference for portable and mobile storage: With space constraints in urban apartments and condos, the demand for portable storage systems like movable cabinets, compact shelving on casters, etc. is rising. These offer flexibility to reconfigure storage layouts. Modular mobile carts are also witnessing increased adoption from hospitals, restaurants and warehouses owing to ease of use and mobility. Providers are introducing wheeled cabinets with height-adjustable trays and foldable storage bins to cater to preferences for portable storage. This also enables multifunctionality allowing consumers to store as well as transport objects. The trend towards portable and mobile storage is thus gaining momentum.
• Growing deployment of automated storage and retrieval: Automated storage and retrieval systems (ASRS) are being rapidly adopted in warehouses and distribution centers of manufacturing, retail and e-commerce companies. They enable efficient stock management, inventory tracking and order fulfillment. Modular automated vertical lifts, carousels, conveyors and sortation systems are enhancing productivity and throughput. Providers are also embedding modular Automated Storage and Retrieval Systems (ASRS) with cutting-edge technologies like robotics, RFID and WMS software to add value. The trend will continue with companies leveraging automated and robotic technologies to maximize returns from modular storage infrastructure.
• Rising preference for eco-friendly materials: Using materials with enhanced durability, recycled content and lower carbon footprint in product design is an emerging trend. Manufacturers are launching racks, containers and shelving made from recycled plastics, sustainable wood composites like bamboo and compressed straw. These help in LEED certification and meeting ESG goals by reducing environmental impact. Market leaders like Constructor Group use up to 99% recycled steel in certain products. The ability to disassemble and reuse components also offers environmental gains over the system lifecycle. With sustainability awareness increasing among corporations, the shift towards eco-friendly, energy-efficient modular storage will amplify.

Modular Storage System Market Restraints:

• Volatility in raw material costs: Modular storage systems are manufactured using raw materials like steel, aluminum, wood, plastics and composites. Pricing fluctuations due to demand-supply imbalance, crude oil prices, transportation costs and tariffs affect profit margins of manufacturers. Sudden hikes in prices of steel, aluminum and lumber over the past year increased procurement expenses for companies. Additionally, the complex value chain from raw material suppliers to Original Equipment Manufacturers, distributors and end users gets strained with cost volatility. Addressing such external factors remains a major challenge for the modular storage systems market.
• Limitations due to standardized designs: The standardized and prefabricated nature of modular storage products entails limitations when compared to customized built-in systems. Consumers often require tweaks in dimensions or design to perfectly fit the storage solution to the available space and intended items to be stored. Lack of such minor customizations can hamper adoption especially in case of cabinets and lockers. While product innovations are addressing this, perception of limitations around customizability affects market growth to some extent.
• Cybersecurity risks: Increasing integration of automation, robotics, Internet of Things (IoT), and software in smart modular storage solutions also increases their vulnerability to cyberattacks. Threats like data theft, ransomware, and system hacking could disrupt workflows. Markets like healthcare using automated medication carts and Radio-Frequency Identification driven retrieval systems have to tackle such cyber risks. Stringent data security and privacy regulations also necessitate enhanced cybersecurity measures in product design. Addressing these effectively requires significant investments by modular storage system providers.

Recent Developments:

New product launches:

• In 2023, SSI SCHAEFER launched its new LogiMAT 2023 product portfolio, which includes a number of new modular storage system products, such as the Weasel autonomous mobile robot (AMR) system and the PickOne light-directed picking system
• In 2023, ManOrga an layout and storage solutions specialist launched its new Smartline 2.0 modular storage system, which features a number of new features such as a new design, improved ergonomics, and increased load capacity
• In 2023, Systems and Space launched its new Stow modular storage system, which is designed for high-density storage of a wide range of items

Acquisition and partnerships:

• In 2023, SSI SCHAEFER acquired the Sweden Based modular storage system company, Modulex
• In 2023, ManOrga a layout and storage solutions specialist acquired the Germany-based modular storage system company, Jungheinrich Fördertechnik
• In 2022, Systems and Space acquired the UK Based modular storage system company, Mecalux

Figure 2. Global Modular Storage System Market Share (%), by Product Type, 2023

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Top Companies in the Modular Storage System Market:

• WillScot
• Mobile Mini
• PODS
• Spacesaver
• SSI SCHAEFER
• ManOrga
• Systems and Space
• Bradford Systems
• Scotsman
• Montel
• Interlake Mecalux
• Modula
• Jungheinrich
• Konecranes
• Dematic
• Toshiba Industrial Systems
• Vanderlande
• Kardex Remstar
• Murata Machinery
• Dexion
• Stow
• Pallet Shuttle
• BoltOn

Definition: The modular storage system market refers to the industry and solutions related to prefabricated and customizable storage products including racks, bins, cabinets, containers, etc. that are built by combining multiple components and modules. These modular storage systems can be easily assembled, configured, and rearranged as per changing needs. They provide benefits like flexibility, mobility, scalability, and ease of installation over traditional storage systems. The modular storage system market caters to diverse end-users across the residential, commercial, and industrial spaces. It is driven by rising construction activities, growth of organized retail, demand for affordable and customized storage, and trend of sustainable modular designs. Key players in the modular storage system market focus on product innovation, partnerships, and geographic expansion to gain share in this growing market.

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